Booming Korean cosmetics exports!
The Korean trade balance for beauty products was in surplus for the first time last year. According to the Yonhap News agency, cosmetics exports in 2014 reached 1.92 billion dollars, that is, an increase of 50.4% over the previous year. Imports rose by 9.3% to $ 1.69 billion. The trade balance thus recorded a surplus of $ 230 million. The largest importing country being China ($ 600 million) followed by Hong Kong ( $ 410 million), the United States ($ 160 million), Japan ( $150 million) and Taiwan ($ 120 million). The Amore Pacific Group exceeded the $ 100 million export mark in 2013! A first for the company whose stock price dramatically surged by 122% last year. It is in this very dynamic context that will be held MakeUp in Seoul in less than three months. An opportunity for Joerg Karas, General Manager of Schwan-Stabilo Cosmetics, JKH Wang, President of FS Korea and for Mario De Luigi, Vice-President of B.Kolormakeup & Skincare to tell us their views and strategies.
MakeUp in : The Asian Beauty market is still recording an important growth. What do you see as your main strong points to be successful in this competitive market?
Joerg Karas: Europe and North America are saturated markets, which means that their growth is driven mainly by product innovation and the search for new niches. South America and Asia are rapidly developing their consumer markets in general. The growth of the beauty market is positively influenced by the increasing female empowerment which is driving consumption of cosmetics. The consumer in Asia might be relatively new to the daily use of cosmetics, but she makes up for it by educating herself and sharing her experience on social media networks such as Facebook, Instagram and YouTube. She is thus becoming an expert and decision maker on products and services.
JKH Wang: Many Koreans manufacturers have managed to seize this opportunity to create absolute jewels in terms of R & D and manufacturing capabilities. Since all of them are now faced with domestic markets close to saturation, sliders are increasingly switching in the direction of China, and more specifically to sophisticated markets represented by the United States and Europe, in a better position to pay Made in Korea products with high level in terms of quality, sophistication and environmental standards
Mario De Luigi: Like, and more than in many other part of the world, Innovation is the most important point that every brand is looking for. If you add quality and service you will have a complete view of the strength of B.Kolormakeup & Skincare.
MakeUp in : You have an international presence. You therefore have a global vision of the evolution of demand at an international level. In your opinion, what main criteria characterize the world’s four major markets, which are Europe, North America, South America and Asia?
Joerg Karas: Being successful in the competitive Asian market calls for a profound understanding of both, the Asian market and local consumers behaviour. Therefore, we consider it very important to show a strong local presence. To further achieve this we will, amongst others, expand the role of Schwan Cosmetics Asia Office, extend our network with local clients as well as suppliers and continuously work on innovations for the Asian beauty market.
JKH Wang: Not divided by region, our main criteria for all the global markets would be Safety, multi-function and full service.
Mario De Luigi: Europe is still driven by elegance, exclusivity, North America by creativity and distribution, South America by a new cosmetic era and quality improvement, Asia by innovation and new cosmetic models.
MakeUp in : What do you think 2015 will be like in your field, in Europe, the Americas and Asia?
Joerg Karas: Given the global political and economic development, we prepare for a turbulent business year with ups and downs. We will be very vigilant and, of course, intend to profit from the ups. The boosting US Dollar will for sure push the demand for products Made in Germany whereas the weakness of the currencies in various other growth markets threatens to slow down market development. In addition, we constantly focus on expanding our global market leadership. With this in mind, we will adapt to quickly changing markets and client requirements, continue to develop our outstanding service quality and further emphasize on the sustainability of our client partnerships. Well furthermore strengthen our global production network especially in the growth markets.
JKH Wang: Even if the economic situation is not that good in all the global markets, the beauty business should be okay like it has been in 2014. But Brazilian, Russian, Indian and Chinese markets are expected to grow more.
Mario De Luigi: As far as we can see right now a growing perspective is touching all 3 areas, it will be up to us to keep the interest of clients in our propositions and give them the chance to be inspired in developing more and more projects to attract the final customer. In every area there are many new brands with interesting and innovating projects who are becoming bigger and bigger. Its really important to think in a different way, in new business models, in products and projects that are different from the ones already on the market. A little risk taking is important in order to find a good place in the future cosmetic world.
MakeUp in : The concept of full-service seems more and more present and desired. Do you agree, and if so, how do you adapt to this situation? What are the advantages and possible drawbacks?
Joerg Karas: Since we have always been a full-service company, adaptation is not a challenge for us. We are convinced that full service will be increasingly required by our customers and we will therefore continue to strengthen our efforts even more in this area. The advantages are obvious: speed to market, entirely fulfilling customer requirements, cost savings, less logistics, less risks etc.
JKH Wang: Full service strategies are a key issue for many companies but its not that easy. I think, innovation is the growth key driver of beauty industries, so to have some advantages in full service, cooperation is important. That means, not only develop innovative products of our own, but cooperate with experts in formulation and packaging, which is a necessity. With full service, we can increase our business but there are also some drawbacks like on the suppliers side who take all the responsibility, including the investment.
Mario De Luigi: Thats true, its helpful for brands but at the same time there is a risk of depersonalization of the brand. A brand is made by concepts and people: if there are too many changes in the concept or too many unlinked people that work on the same project its more difficult to achieve a final strong result.
We take good care of every service we supply to our clients no matter if its a full service or not. A good quality control is still important in order to avoid problems. We believe in it and we dedicate a lot of attention to it.
MakeUp in : You exhibit at almost all the MakeUp in trade shows. In a few words what, do you believe are the key strengths of these events?
Joerg Karas: Although every show has its specifics, the MakeUp in shows actually are of special relevance for us: More than others, they focus on B-to-B and therefore offer the possibility to rather do business than only meet & greet. For this reason it is in fact an innovative concept that helps us to successfully develop business of both, that of our clients and of Schwan Cosmetics.
JKH Wang: Not only literally different from other exhibitions, the MakeUp in shows are well organized and managed with a strong attendance and enthusiastic exhibitors. And their unique strength is what you already know: human scale, intimate, but professional atmosphere.
Mario De Luigi: The uniqueness of the concept, its specialization in a specific field and the initial concept of exclusivity of a product is and must remain what makes its value. I wish that this selection of unique and serious exhibiting companies remains the same and also that this real sense of exclusivity is preserved in the future.